Tuesday, May 31, 2011

The Perils of a Two-Speed Union

I always learn a lot from cab drivers, if only by hearing perspectives first-hand.  My latest lesson came from a cab driver in northern Italy.  This older gentleman had been a project engineer for a very prestigious German corporation, but when it moved he chose to eschew the big city life and stay home, taking over his father's cab.  Such a choice would be virtually unthinkable in the U.S.  This gentleman was no stereotypical welfare state European as imagined by American minds, though.  A question about local cuisine prompted a lengthy and welcome lesson on Italian history.

"Italy is imaginary," the cab driver told us.  He explained the familiar story of the geographic lines that historically divided the peoples of Italy into separate entities, often organized as city-states, each of which had its own dialect, or even its own language.  A town 15 kilometers away from his, he asserted, really had its own language that he could not understand.  I do not know enough about Italy to know if these dialects are still widely known, but I do know that this was the case in many of the countries of Europe until the not-too-distant past.  The Discovery of France, by Graham Robb, is a wonderful story of the localism of France, for example.  So, the cab driver continued, it was only during football matches or questions of national insults that he declared himself Italian, thumping his chest with the word.  Otherwise, identity was much more local.  This is no surprise.

But add to this a political and economic dimension and perhaps the local particularities are growing.  The north-south split in Italy has long been recognized.  Robert Putnam, for example, wrote about it in Making Democracy Work: Civic Traditions in Modern Italy, for example.  Our driver continued, explaining about the hard working nature of the north and the industry there, yet, "Our taxes are the highest in all of Europe.  They all go to Rome, and foof," blowing in his hand he mimicked their disappearance.  Politics, he suggested, had failed in their accountability to people like him, the voters.  Instead, the various local and regional iterations of the mafia, along with the Vatican, held veto power over the political realm and kept it in a dysfunctional stasis.

This is only one perspective, but it is representative of a larger sentiment that resents the redistribution of progressive tax policies.  This engenders support for what The Economist calls "secession of the successful."  This thought is applicable from the level of local municipal policies, where the rich (from California to Brazil and elsewhere) choose to provide their own services through private contract, whether in the form of schools or gated communities with security, to countries (e.g. the feelings of this northern Italian), to international unions like the E.U. where Germans bemoan the redistribution of their structural funds to profligate southern European states.  Where unions are perpetually two speed, I do not see how this centrifugal force can be counteracted.  Even so, respected academics addressing, for example, the imperative for the EU to accept the immigrants coming from the North African disaster, insist that Europe will have to figure out how to make the best of the situation and accept these unskilled refugees, while completely ignoring the existing centrifugal forces that reside within the union.  The confluence of these issues with upcoming domestic elections in Europe may prove explosive.


  1. IIRC, Tony Judt's "A Grand Illusion" makes somewhat the same point.

    And perhaps looking at past unions provides traction for looking at contemporary unions:


  2. And,


  3. I was doing some reading this past week. Your comment above, "where Germans bemoan the redistribution of their structural funds to profligate southern European states" made me think of this:

    "Who imagines that there exist any common ideals of distributive justice such as will make the Norwegian fisherman consent to forego the prospect of economic improvement in order to help his Portuguese fellow, or the Dutch worker to pay more for his bicycle to help the Coventry mechanic, or the French peasant to pay more taxes to assist the industrialization of Italy.”

    Without the reference to the bicycle and the French peasant, this could have easily come from last week’s Economist. I found it in Hayek’s “Road to Serfdom” in the chapter on the prospects of international order. He basically goes on to predict that the European Union (even before it had come into existence, and not calling it such) would not work.

  4. Very good cite. I may use that. I have to pull the book off my shelf. I may already have the passage underlined. Thanks